The Nation's international deficit in goods and services increased to $617.7 billion in 2004 from $496.5 billion in 2003.
For December, the goods and services deficit decreased to $56.4 billion from $59.3 billion (revised) in November. Exports increased $3.1 billion from November to $100.2 billion in December. Goods were $71.1 billion in December, up from $68.1 billion in November, and services were $29.1 billion in December, up from $29.0 billion in November. Imports increased $0.1 billion from November to $156.6 billion in December. Goods were $131.7 billion in December, up from $131.6 billion in November, and services were $24.9 billion in December, up from $24.8 billion in November.
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For 2004, exports of goods were up $94.5 billion from 2003. The largest increases occurred in capital goods ($37.5 billion; primarily industrial machines, telecommunication equipment, electric apparatus, and control instruments); industrial supplies and materials ($30.5 billion); and consumer goods ($12.9 billion).
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For 2004, imports of goods were up $213.1 billion from 2003. The largest increases occurred in industrial supplies and materials ($98.6 billion; primarily crude oil, iron and steel products, and other petroleum products); capital goods ($48.0 billion); and consumer goods ($39.3 billion).
* For 2004, exports of services were up $31.2 billion from 2003. The largest increases occurred in travel ($10.2 billion); other private services ($8.5 billion); and other transportation ($5.5 billion).
* For 2004, imports of services were up $33.8 billion from 2003. The largest increases occurred in other transportation ($8.9 billion); other private services ($8.5 billion); and travel ($8.0 billion).
Note the imports/export ratio of goods imported/exported is roughly 2 to 1. In addition, the dollar decreased in value over this period of time roughly 5%. In other words, the dropping value of the dollar had a negligable impact on the trade deficit.
The Bush administration is arguing that because the US economy is growing faster than other countries, the trade deficit simply represents the strength of the US economy. This is a poor argument at best. It doesn't even begin to address the massive debt associated with this trade deficit. Currently, the US must import about 1.8 billion dollars a day in capital to maintain its standard of living. In addition, I seriously doubt that the only solution is simply growing the economy.
The 5% drop in December's numbers is good. But it is only one month. The administration will try and spin this as the top of a massive reversal. I hope that is true. But, it is only 1 month of reporting.
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